Millions of expats living in the UAE regularly transfer money overseas. The UAE is one of the top global remittance hubs, with billions of dirhams sent abroad each year. To make international transfers in the cheapest, safest, and most efficient way, it’s crucial to understand the exchange rate offered and any applicable fees.
Understand exchange rates
When you check an exchange rate on Google, it shows the “mid-market rate” or the real interbank rate used by banks when trading. However, many providers don’t offer this rate and instead add a markup, sometimes as high as 2–4%, potentially costing you hundreds of dirhams for larger sums. For instance, sending Dh10,000 to India at a rate just 1% lower than the market rate results in an immediate Dh100 loss. Therefore, always compare the offered exchange rate to the mid-market rate.
“There are some exceptions, but generally banks don’t offer the best rates,” says Steve Cronin, founder of DeadSimpleSaving.com. “Digital banks and exchange houses tend to offer better rates due to lower overheads and competition on price.” Wise is often recommended for its competitive rates. “We believe pricing should be fair and simple. Our customers see the mid-market rate when using Wise,” a spokesperson told Khaleej Times.
Hidden fees
Fees can also catch you off guard. Besides an upfront fee, there may be other fees such as the ‘correspondent banking fee’. While your bank or platform may claim no fees, the recipient might receive less than expected due to these charges by the ‘correspondent bank’. Additionally, there are ‘receiving bank fees’. Even if your bank has an upfront fee, the receiving bank abroad may charge the recipient. Be cautious of “zero-fee” transfers as they may still cost more if the exchange rate markup is significant.
Careem Pay facilitates international money transfers from the UAE to over 30 countries. “Careem Pay addresses the long-standing challenges of high fees, slow transfers, and unclear rates in the remittance market,” says Mohammad El Saadi, Careem Pay VP. “We offer rates up to 50% cheaper than banks, with consistently low fees.”
Timing transfers
Exchange rates fluctuate constantly, making timing crucial. Apps like Wise allow you to set alerts for favorable rates, enabling transfers when the dirham is stronger against your home currency. Careem Pay initiates transfers within seconds through the app and features in-app rate alerts for optimal transfer timing.
A lack of transparency led to the founding of Wise 14 years ago, after experiencing hidden exchange rate mark-ups when sending money. Now, the platform serves over 15 million customers. “Banks often advertise zero fee offers and market-leading rates, while hiding exchange rate mark-up earnings in tooltips, complicating consumers’ and businesses’ understanding of the true cost of sending money and the received amount,” a spokesperson adds.
Top providers
According to DeadSimpleSaving.com’s Cronin, the best rates globally are offered by Interactive Brokers and Revolut. “Interactive Brokers is a brokerage, encouraging investment in stocks, ETFs, etc., rather than solely currency conversion. Transfers can only be made to or from a bank account in your name, accepting major currencies and UAE dirhams,” he explains.
Other recommended providers include CurrencyFair, Lulu Exchange, and GC Partners. “For large money exchanges, focus on the exchange rate offered and seek the best one,” adds Cronin. RemitFinder aggregates exchange rates from several UAE providers, aiding in comparing offers and finding the best rates. For speed, Careem Pay says transfers can be completed in as little as 11 seconds, with average transactions under 60 minutes.
What about using cryptocurrencies to transfer money, bypassing intermediaries and fees? “Stablecoins (a more stable cryptocurrency type) can avoid large cross-border transfer fees, but you may still incur high costs for on-ramps and off-ramps – converting from fiat to crypto and back.”
